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The U.S. economy is slowing up again and suddenly the likelihood of another downturn and of a double dip recession has become very real, sparking a great debate in Washington between those calling for more stimulus and those calling for fiscal responsibility as a way to create confidence among investors.

Here in Singapore from where I am writing this sounds like a surreal debate. With a current GDP growth rate of 19 percent (no, that’s not a misprint), Singapore is neither stimulating nor cutting government expenditures. What it is doing is exporting and attracting foreign investment to further strengthen the export machine that has driven unemployment to under 2 percent. Contrast that with the United States where the $400 billion trade deficit is again on the rise as official unemployment again tops 10 percent and real unemployment heads for 18 percent.

The discussion in the United States ought to be how we can imitate Singapore. President Obama made a half hearted step in that direction when he announced the goal of doubling U.S. exports. While that was a good first step, it totally ignored the other steps necessary to realization of the goal. In the first place, rising exports only help economic growth if they are accompanied by relatively declining imports. Obviously, if imports triple while exports are doubling, not much has been accomplished in terms of reducing unemployment. One important way other countries like Singapore keep exports rising more than imports is by managing exchange rates to ensure that their currencies are not over-valued. With the dollar now generally considered to be anywhere from 15 to 50 percent over-valued versus the Chinese yuan and other Asian and European currencies, this is a policy the Obama administration might well consider imitating.

Singapore officials also work hard at persuading global companies to off-shore their production to Singapore. To do this they use special tax abatements, low corporate taxes, offers of free infra-structure, free land, and free worker training, and world class infra-structure to help reduce production costs. In lieu of matching U.S. programs, virtually the whole of Silicon Valley has moved at least some production and even R&D to Singapore, thereby creating Singapore jobs while reducing U.S. jobs.

This is not rocket science. Americans could do it too, but not until they start having a real world discussion.

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